17 August 2012

Article about CBTec in HBL

Just about a week ago HBL (one of the biggest Swedish language magazines in Finland) published an article about CBTec. For those of you who don't know Swedish, here is an unofficial translation.

Hundreds of companies emerged from Nokia's ruins.
Published in Hufvudstadsbladet on 11th of August 2012
Original article in Swedish written by Annika Wilms

Within a little more than a year, Nokia announced that 6400 employees would be removed. Of those who had already left Nokia, most have found new jobs, some as entrepreneurs.

“I stayed until the end”, says Sergey Gerasimenko, who in April 2011 was told he would lose his job when Nokia scrapped the operating system MeeGo. He closed the door behind him in the Nokia office in Ruoholahti, Helsinki earlier in May this year. Nokia moved out and the large glass office complex became empty. But only a week ago Sergey and some colleagues moved in to a new office in Salmisaari, just a few blocks away from their former workplace. They founded CloudBerry Tec. Four out of five co-founders have been working for Nokia for a very long time. “I grew up there”, says Ouyang Qi, another co-founder.

Technically, none of them were fired. They received Nokia's severance package and resigned. The size of the severance packages was from 5 to 15 monthly salaries, depending on the service years at Nokia. The maximum amount was later reduced to 12 months' salary. All of them would have loved to stay at Nokia, if it hadn't chosen to scrap MeeGo in favor of Windows Phone.

“We, at MeeGo, were Nokia's future. We loved Nokia and the job we were doing. Certainly we are bitter over the strategy change, but instead of crying, we decided to go forward and do something new”, says CloudBerry Tec’s Chairman Sotiris Makrygiannis.

This new is the education industry where computers and tablet PCs are increasingly replacing paper books and pencils. Wikipedia, Facebook and Twitter can help students to find all kinds of supplementary information.
“The educational market is worth seven trillion. With our product we will bring together Nokia's best engineers and Finland's good reputation in education”, says Makrygiannis.

The five-month old company already has a turnover of half a million euros and 15 employees in Helsinki, Kuusamo, Oulu, Sunnyvale and Stockholm. Some of the money comes from consultancy services. In April 2011, Nokia launched the so-called Bridge Program to help ex-employees find new jobs. As part of the program, an employee who starts a business can receive up to 25000 euros in seed funding from Nokia. CloudBerry Tec didn’t get this funding because it had more than 4 founders.

“We received valuable advice and assistance with the creation of a business plan and preparation for public funding applications”, says Vitaly Repin. He is convinced that something good can come out of Nokia's decline and all the talent that is released. “The good thing is that we have more freedom now. The bad thing is that we have lost the infrastructure and support that existed at Nokia” he said. His advice to those who lose their job is to think globally and positive.

“But it's not easy for everyone to find new jobs”, says researcher Jyrki Ali-Yrkkö who is following the former Nokia employees' situation. “There is a big difference depending on what kind of jobs people had in Nokia. The factory workers from Salo are in the most difficult situation”, he said.

Not all job cuts have been implemented yet. The main question is what happens in the future. The unemployment rate has not risen after the cuts Nokia announced in June, mostly because staff reduction is still underway and the recent announcement of 3700 jobs has not yet begun to be enforced. Time is on the employees side. If everyone would be fired today there is no chance that everyone would find new jobs. But all the job cuts will be implemented by the end of 2013.

According to Nokia, almost 1500 employees participated in the Bridge program by the end of May, and the program will run until the end of 2013. Two-thirds of them have found new jobs, mostly outside of Nokia. An inquiry from Aalto University shows that small and medium-sized software companies are employing 650-850 former Nokia employees. In addition, 220 new businesses have been established with assistance from the Bridge Program.

“Statistically most of the new businesses will cease to exist in 5 years”, says Jyrki Ali-Yrkkö. “Although the labor market has so far swallowed the fired Nokians, the recent cuts are so big that it will definitely affect the unemployment rate, says Espoo's Business Development Director Tuula Antola. “There is a shortage of tens of thousands of IT experts across Europe. We need to attract international companies to Finland”, she adds. Antola names environment and health as two sectors where IT skills are needed in the future.

“All redundant employees can not be employed, but we hope that the company will start to grow rapidly and recruit. The goal is to double the number of employees next year”, says CloudBerry Tec COO Marko Miinalainen.